GameStop isn\’t dead, despite Sony\’s new game service

So, is Sony Corp.\’s new streaming videogame service the death knell or not for GameStop Corp?

That\’s a matter of debate. On Tuesday, it seemed like the sky had fallen in on GameStop
after Sony used the Consumer Electronic Show to unveil its PlayStation Now service, which will launch in the U.S. this summer. The announcement led to Stifel analyst David Schick cutting his rating on GameStop to hold from buy, and GameStop\’s shares falling more than 8% by the close of trading on Tuesday.

The fear regarding GameStop came from a belief that the Sony
streaming game services will do to game retailers what online video services like Netflix Inc. did to video-rental businesses like Blockbuster — put them out of business.

But on Wednesday, GameStop had recovered a bit. The shares are off some Thursday, but still off their lows from earlier in the week. Tony Wible, of Janney Capital Markets, maintained his buy rating on GameStop, saying that it is too early to say that GameStop\’s days are numbered because the market for streaming game-playing services is still in its infancy.

\”We have no idea the scope of any service or how it would be priced to manage risk, which may inevitably be the biggest issue facing any service,\” Wible said, in a research note. \”Will it support casual games or hardcore console games? How would publishers be compensated if it is a subscription based product?\”

Sony said the PlayStation Now service will deliver games to PlayStation 3, PlayStation 4 and PlayStation Vita consoles. However, Michael Pachter, of Wedbush Securities, said \”until we know more about game availability, timing, and pricing, among other factors, we do not see a meaningfully negative impact to GameStop in the near-term.\”

So, for now, GameStop still has plenty of titles on its shelves, and plenty of customers coming in.

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